This site, like many others, uses small files called cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on this website (Cookie Policy). However, if you would like to, you can change your cookie settings at any time.

Have your say on the new Insurance Times Five Star ratings - Commercial Lines & Personal Lines - the first at a glance guide to insurer experience created for brokers by brokers. See what brokers have been criticising or praising about the companies you use and click the Have your say link next to the insurer name to add your views.

That sinking feeling

By 2001-07-05T00:00:00+01:00

Subsidence has not become more technically complex, but the challenge is to focus on the policyholder while still ensuring effective claims resolution. Ten years of project-managed subsidence within Cunningham Lindsey has shown that the technical diagnosis of subsidence claims can, be achieved relatively easily.

However many engineering practices and other loss adjusters have striven to create an esoteric technical aura around the subsidence process, which is only understood by a few highly skilled technical staff. This tends to mask the greater challenge, which is to deliver good customer care and effective claims resolution within reasonable time and cost restraints. If the Met Office's prediction for a drier and warmer summer this year is to be believed, the challenge could be even greater than usual in 2001.

This is not to decry the need for the application of technical expertise, particularly at the outset of the claim. Good diagnosis is the key to effective resolution and the real skill lies in identifying the “mechanism of movement” through the pattern of cracking and distortion. Once this is understood, the correct mitigation measures and repair can follow.

The answer is not to make the technical elements more and more rarefied in an attempt to make a science out of something that is more of an art. Identifying the mechanism is very much a hands-on skill, based upon engineering or surveying knowledge and developed through accompanied visits, continual audit and improvement. It is vital that these skills are linked to a sound understanding of insurance principles, together with the proper consideration of policy liability.

Solid partnership linksAs well as the correct application of the technical skill for diagnosis, there is also a temptation for all the technical aspects of the process to be undertaken by the engineer. Traditional methods of dealing with subsidence claims promote this as a benefit, but it is important to realise and identify limitations.

Often other skills and expertise are needed, which lie outside of an engineer's core competencies. Instead of trying to capture or develop these skills in-house, relationships should be developed with groups such as arboriculturists, site investigation contractors, solicitors and repair contractors, allowing expertise to be brought to bear on each claim at the appropriate stage.

An effective partnered team approach relies on trust and co-operation, which means that, as a business, we put as much effort into working with partner companies as developing our own technical skills. By combining expertise, a dialogue between partners develops, which allows wider complementary fields to be identified and exploited, to the advantage not only of the insurer, but also the policyholder.

The aim is not to become an expert in every field as the traditional approach to subsidence propounds, but to develop the links and connections to deploy the expertise when needed. The potential benefits from an open and trusting relationship with a partner are significant both in terms of cost control and customer care.

Service challengeThe subsidence arena has developed significantly in the past five years. Proper understanding and control of technical aspects should now be a given. Adding unecessary complexities into these areas is not the key to delivering a better service.

The new challenge is to deliver effective customer service as part of the claims handling process. In many ways this is more challenging, because it is less prescriptive than the pure technical guidelines that engineering practices would be accustomed to following.

Engineers realise that the factors affecting the movement of a house might have long-term effects and take some time to resolve. The house owner has an entirely different perspective. To emphasise the technical elements over the management of customer expectations completely misses the point of claims handling. Understanding and dealing with customer issues has real benefits in terms of claims resolution and customer retention.

The high value and high trauma level of subsidence claims for most policyholders means that rapid decision making, effective management of the claims process and a move away from blinding people with science can only be beneficial.

This is linked with greater customer awareness by engineers and surveyors to see the associated benefits, such as removing or reducing the need to monitor the property, or demonstrating that the damage is not subsidence at all – thus removing the related concerns of blight and recurring problems.

If the policyholder can see the repudiation of their claim as a positive benefit rather than a piece of technical skulduggery to avoid the operation of the policy, this has to be a big win for all concerned.

In recent years, there has been a reduction in subsidence claims and this may partly explain the emerging trend to build technical complexity back into the claims process. These trends are identified if the portfolio is considered as a whole. Data is the vital element, both in terms of predicting subsidence damage and interpreting ground movement.

Management of insurer expectations requires control of the overall portfolio of claims. Predictions can be made regarding the total costs for any one portfolio year, as well as providing access to the arena of portfolio reserving. This in itself gives insurers greater certainty of their own reserving costs and the effect that movements in this may have on pricing claims years.

Interpretation of this broader picture of the subsidence claims process, and a movement away from claims as individual technical transactions, is important in the development of subsidence as an area of competence for adjusters as opposed to engineers.

Process developmentGood diagnosis is vital to effective claims resolution, but the technical aspects promoted by various engineering and adjusting practices cannot overshadow the claims process. A sound understanding of technical issues, management of customer expectations and an awareness of the larger portfolio issues are a prerequisite of claims handling. Specialist expertise no longer needs to be developed at great cost or at the expense of a focus on the customer, but instead created through targeted specialist partnerships.

These relationships bring expertise without significant increases in fixed costs and they also provide the opportunity to develop complimentary fields and markets. In terms of training, the challenge for the industry is to build effective customer care, delivering a more responsive claims settlement.

Control of all these aspects, and the continual development of the subsidence process, is what project-managed subsidence is all about. Complete incident management is what customers and insurers now demand. The industry has to come to the realisation that technical expertise alone is no longer enough.

Richard Rollit is the engineering services director of Cunningham Lindsey.

Topics

Related articles

GWP: £3.9bn Management Group chief executive Stephen Hester’s future at RSA is now in question after rival insurer Zurich’s £5.6bn bid to buy RSA collapsed. Zurich blamed problems in its own business, rather than anything untoward it found in RSA’s, for its withdrawal from the deal. But ...

GWP: £3.3bn Management Current ABI chairman Paul Evans continues to run the AXA UK group, which comprises AXA’s non-life, life and health business. From 1 January 2016, the UK general insurance business will be run entirely by Amanda Blanc after she takes over the only remaining ...

GWP: £3.1bn Management The top team of chief executive Paul Geddes and chief financial officer John Reizenstein continue to lead the UK’s biggest personal lines insurer. If the company’s performance on the stock market since its 2012 flotation is anything to go by, the pair and their ...